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Continued emphasis that the market is underappreciating inflation persistence risks

BOE
  • So far the only real "new" communication has been surrounding the BOE emphasizing the upside risks to inflation.
  • All the MPC members on the panel today have been saying that markets are under-appreciating the persistence of inflation risk - and that difference of judgment is why markets are pricing in the cuts that they are pricing.
  • And there has been pushback on Pill's previous comments that market rates were appropriate by clarifying that they are only appropriate under the market's current assumptions. And those assumptions don't have enough risk of inflation persistence in them.
  • They really want to be hammering home this message.

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